What is secondary insurance?

Secondary insurance, also called excess insurance, is a policy that covers expenses left over from a primary policy.

If your medical expenses are covered by more than one insurance plan, typically the primary plan needs to be billed first, and the secondary plan bills after.

Usually, one of two things will happen with your billing.

1. Your primary insurance will pay its entire allowed maximum, and your secondary insurance will cover any remaining unpaid charges.

2. Your secondary insurance will pay the exact amount owed by the primary insurance plan.

Your secondary insurance policy will provide more information on how they will pay out your benefits.

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Here's an example of how secondary insurance works:

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Let's say you have a primary health insurance plan with a $1,000 annual deductible and an 80/20 coinsurance. You also have a secondary health insurance plan with a $500 annual deductible and a 50/50 coinsurance.

You go to the hospital and have a $10,000 medical bill. The primary insurance pays out the following year:

- $1,000 for your deductible

- 80% of the coinsurance, or $7,200.

- Total payout: $8200

Your secondary insurance steps in and pays the following, up to the policy's limits:

- $500 for the deductible

- 50% of the coinsurance, or $3,600.

Total payout from secondary insurance: $3,600

In total, you are responsible for $800 in out-of-pocket expenses ($1,000 + $500 - $8,200 - $3,600).